0062 WWC Kent Johnson: Family-owned Business

Wrestling With Chaos

In this episode Kent Johnson, CEO of Highlights for Children, a family-owned business with a majority of independent Board members, discusses a series of topics ranging from his sudden take-over of the CEO position at age 36 due to the death of the incumbent to how the company started to the different avenues of childhood development Highlights pursues. To compound the situation he actually did not want the position since he was working successfully in biotech. Kent refers to the great mentorship he received from the Board of Directors which helped insure assuming the CEO position would be successful. A real plus was governance in terms of having sat with the Board for 2 years prior. The challenge of juggling a wide range of stakeholder populations was achieved by first focusing on the employee population since they were the main determinants of whether or not Kent would succeed, a key determinant of any leader’s success. As to general traits of being a good CEO Kent felt working hard and a willingness to listen are two key character traits. Kent’s father’s work as a scientist and his mother’s work as a politician working in the community contributed immensely to the foundation needed to succeed as CEO. It provided key lessons in diversity and its value in succeeding in meeting everyone’s needs. Humility is key. Fortunately, people are focused on the mission and avoid major, internal political struggles. To support this Kent will tell people, especially when asking a detailed questions, he just needs to know. His scientific training can creep in because he was trained to question everything…details, details. His training does help growth since promoting experiments is key to finding opportunities. Risk Management! In terms of income, Highlights for Children, is not their major source of income. Zaner-Bloser, professional development for teachers, etc. help create an environment where the organization can succeed especially by marketing to government agencies in order to gain sponsorship for their children. Chaos- and complexity theory come into play because there is a constant balancing act required to keep the company balanced, fresh, and appropriate for the markets they serve. Financially, grounding work in risk management is essential because a sunk-cost frame of mind is needed to determine whether or not continued investment in diversification strategies is essential. In turn, these efforts are grounded in a belief of what they can do for kids that will help them flourish. Consequently, a balance is struck in deciding when it is best to stop a highly-desirable project that is failing to show the necessary return potential. This is especially true as the world moves faster and faster. In line with this speed of business the criticality of maintaining balance in a constantly-changing environment is critical. In other words, Kent has to focus on, “How do we need to change in order to stay relevant?” As a middle-market company managers are expected to help in terms of looking at the outside world and how it is changing along with keeping existing workflows moving forward. This includes managing conflict through rules of engagement, e.g., assume a positive intent when there is conflict, work to provide solutions, examine assumptions, examine clarity of rules, examine possible consequences. This leads to clarity and alignment of goals from the Board to the employee. Managers must “translate” from one level of the organization to another. This alignment is critical especially when working with outside partners. Motivation can be a major task encouraging employees to work on change, stay focused on the problem-at-hand, and maintain respect for each other, i.e., an egoless team — hammer the idea, respect the people. Trust is critical. Debate in a trustworthy manner rather than attack resulting in interpersonal conflict. Conflict and fear crush innovation. Trust and discipline lead to thriving. Inclusion is vital since different personalities come at a situation, problem, or opportunity differently. A straightforward example is Extroverts want to jump in immediately and get “out there” right away vs Introverts who need time to go back to their space and think about things in order to explore and then come out with their ideas/proposed solutions/etc. A solutions-oriented frame-of-mind rather than attack/defend - that’s the key. Some of the challenges facing Highlights for Children is, as mentioned, is keeping up with the changing environment and staying relevant in developing the whole child. Another includes the business models used, e.g., the “magazine” part of the business is challenging but it is essential to go beyond just being a magazine for children. High Five is a good example — it focuses on being a part of a child’s development (preschoolers and kindergarteners). This leads to “Highlights Habits,” a range of products within which the child can explore. So “Highlights for Children” becomes the spine from which products flow develop that achieve the goals within the mission strategy of the 4 C’s - Creative, Caring, Confident, and Curious - and how the child goes through their day. This includes curriculum development for the influencers in the child’s life. An example of this is “Hidden Pictures,” which helps with critical thinking for children by doing puzzles. It helps children learn to use different tools and processes. I commented on how this helps with developing the child’s Axis Mundi — creating a space where the child’s “insides” meet the world’s “outsides.” The child is offered an experience. At “Highlights” this is expressed in their slogan, “Fun With a Purpose.” Childhood is a short, sweet season where they learn to love engaging with the world. The children can engage with the characters in the tools. Instead of tools alone, children are taught to have a sense of right and wrong and the tools to apply that sense in their life and change as they see appropriate. The hope is teaching children how to immerse themselves in the 4 C’s can help them solve major problems as they grow older and go out into the world. This is all grounded in ideas that started with the founders of the company, Kent’s great-grandparents who founded the company in 1946 when they were 61 & 59 - starting on their own new careers at that time! Being flexible and change while being faithful to core principles is the constant challenge while also trying to move faster is the challenge Kent faces — surfing the edge of chaos. This all leads to a fascinating work stream frame-of-mind challenge which imagines there is no magazine and no existing business, “What activities should we pursue to achieve our mission?” I pointed out that whether conscious or unconscious this gets to practical applications of Complexity Theory and Chaos Theory, necessary for moving through a changing world by promoting healthy child development. This means the company works at a meta level with a focus on child development through the creation of an ecosystem around “Highlights for Children” that supports achievement of their mission statement. The content may change, e.g., the magazine may have changing relevance and will just shift to its proper place in the ecosystem where certain needs for relevance are constant, e.g., touch being important with activities such as sitting on a parent’s or grandparent’s lap and reading “Highlights” together. Kent’s profile can be found on LinkedIn. Need help dealing with complex situations? You can download CMC’s free e-book MINDSET – 5 SIMPLE WAYS TO LOOK AT COMPLEX PROBLEMS and learn how to find a simple vantage point from which you can resolve challenges. Your feedback is important. Choose from the following options: • place a review in iTunes, • send any comments along with your name and the show number to [e-mail] Listen to future episodes for our reply.